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Are penalties for N.S.F. checks per Ca. Labor code 203-1, 98.1(c),1194.2 and/or 2802(b) payable to me if company in chapter 11?

Santa Maria, CA |

I was paid with N . S . F . checks . I turned the company into the California . labor commissioner . Penalties have been accrued on unpaid checks , plus the 72 hour law . Company filed chapter 11 . Can I still collect the penalties from the bankruptcy court ? Have filed a complaint , and I am waiting for a hearing date on the Labor Board side . But was told I may have to switch it to the Bankruptcy side of the law .

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Attorney answers 3


You can (and should) file a claim in the Chapter 11 case for the entire amount of what you are owed, including any penalties and interest through the date of filing of the Chapter 11 petition. Wages and commissions earned in the 180 days prior to filing, up to $10,000, are giving priority status in the case. That means they get paid before most other debt. Your claim also needs to reflect that a portion of your claim is entitled to priority.


Attorney Riddle answered your question thoroughly.

The proof of claim form is available on the internet. It should be fairly easy to fill it out. Attach copies of the NSF documentation. Mail the original plus one copy and a self addressed stamped envelope to the bankruptcy court where the Chapter 11 case is pending.

In addition, you may be violating federal law by pursuing whatever "complaint" you filed with the Labor Board since the company is in Chapter 11. Beware.

Good luck.

If you need further clarity, please email me at MICHAEL@MIRELAND.US Answers to questions are for general information purposes only and do not establish an attorney-client relationship. This is not legal advice, simply information. You SHOULD NOT act on this information without consulting a competent bankruptcy attorney in your area and providing ALL relevant information.


I agree with my colleagues and I just want to add that you need to be very careful. If many employees got stiffed and you are simillar enough, I would get together with them all to hire an attorney. Maybe you can't afford one, but all of you pitching in can make life easier.

The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: for more information about my services.

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